Government explains petrol price jump

Content image - Phnom Penh Post
Ministry of Commerce explains recent increase in petrol price. Heng Chivoan

The retail price of petrol in Cambodia has increased for the third straight month, upsetting many who work in low-paying jobs, such as tuk-tuk drivers.

The price jumped to 4,200 riel per litre in mid-October from 3,950 riel in July, according to the Ministry of Commerce.

 

The price increase is hurting low-income families as the cost of the Kingdom’s upcoming traditional Pchum Ben Festival continues to rise.

Sitting on his tuk-tuk awaiting customers along Mao Tse Tong Blvd, Hak Samorn, 42, noted that the price of petrol continues to increase following the national election in July, cutting into his income.

 

“Fuel price increases make it difficult to earn a profit for a tuk-tuk driver like me, who has to support daily living costs and children as well,” he said.

Samorn, who has worked as a tuk-tuk driver for three years since 2015 said the competition in the transportation sector is also another challenge.

“Competition in the sector is increasing, and I can’t find more customers,” he said

The ministry said in its announcement on Wednesday that the retail price of petrol relies on price fluctuations in the global market, as Cambodia depends mainly on petroleum imports.

“The retail price of petroleum in the international market recently is increasing considering the political context in the world, especially complicated disputes between Western countries and major petroleum suppliers,” the announcement said.

Oil prices in the international market spiked this week to a four-year peak, with Brent crude at nearly $85 per barrel as a result of stretched global supplies caused by the US sanctions on Iran.

The ministry recalculates the retail fuel price cap every 10 days, based mostly on the trading price of crude oil in Singapore.

However, the period has been extended to 15 days since July, according to the ministry’s announcement. Its officials could not be reached for comment on Thursday.

Affiliated Network for Social Accountability head San Chey said any changes would be announced.

“Extending [this period to] longer than 10 days without reason is indicative of kickbacks to someone who could benefit from the delay,” he said, adding that the government should instead reduce the import tax or provide subsidies to consumers.

Supreme National Economic Council senior adviser Mey Kalyan said Cambodia being an importer of petroleum, and the Iran-US disputes have created petroleum price fluctuations that has have had a sharp impact on the Kingdom.

“We cannot avoid the impact when the price of petroleum fluctuates in the international market. But, we should understand how to use petroleum more efficiently for the industry, or try to figure [out] something better to replace [it] rather than rely on [it],” he said.

However, Kalyan said the government should inspect business monopolies in and find a way to manage them.

A motodop driver in Phnom Penh, Peng Heang, said the challenges are not only in the price of petrol, but taxi booking services like PassApp and the Phnom Penh City Bus services that are free for some are hurting his earnings.

“Petrol price is not the only problem. I have to compete with taxi booking services and the city bus. My breath has almost ended being a motodop driver,” he said.